The EOQ model is most relevant for which one of the following? a. ordering items with...

The EOQ model is most relevant for which one of the following?

	a.	ordering items with dependent demand
	b.	determination of safety stock
	c.	ordering perishable items
	d.	determining fixed interval order quantities
	e.	determining fixed order quantities

Solutions

Expert Solution

EOQ is best used for

Determining Fixed ordering quantities

Option e is correct

It is because, EOQ model is used in cases when annual demand is fixed. Hence, fixed order quantities which will minimise the cost are calculated by using EOQ method.

keosha answered 1 year ago

Next > < Previous

Related Solutions

1)The EOQ model is most relevant for which one of the following? a. ordering items with...

1)The EOQ model is most relevant for which one of the following? a. ordering items with dependent demand models b. determination of safety stock c. ordering perishable items d. determining optimal quantities for independent demand models 2)ABC analysis is based upon the principle that a. all items in inventory must be monitored very closely b. there are usually a few critical items (A items), and many items (C items) which are less critical c. the safety stock (in terms of...

1. What happens to the validity of the EOQ model of ordering when the reorder point...

1. What happens to the validity of the EOQ model of ordering when the reorder point (ROP) exceeds the maximum inventory level during each cycle of replenishment? Use suitable sketches to support your answer. Limit your answer to two pages 2. For the normal distribution, “joint sufficiency condition” implies one needs only to know the mean and standard deviation of the data distribution to be able to apply it. With this as a fundamental principle, discuss the significance of the...

For an EOQ ordering quantity of 750 units, an ordering cost of $5 per order, a...

For an EOQ ordering quantity of 750 units, an ordering cost of $5 per order, a holding cost of $10 per unit per year, and an annual demand of 900 units, what is the annual total cost for this value of Q?

Which one of the following items is most likely to be reported as goodwill? A. Skilled...

Which one of the following items is most likely to be reported as goodwill? A. Skilled workforce B. In-process research and development C. Brand names D. Developed technology

Which of the following is NOT an assumption of the traditional economic order quantity (EOQ) model?...

Which of the following is NOT an assumption of the traditional economic order quantity (EOQ) model? a. Holding and ordering costs are stable and known. b. Demand is constant and known. c. Supply lead time is constant and known. d. Quantity discounts are possible. Kim’s Nail Salon uses a weighted moving average method to forecast demand. She assigns a weight of 5 to the previous month’s demand, 3 to demand two months ago, and 2 to demand three months ago....

Which of the following is true of the EOQ model? Note that the optimal order quantity,...

Which of the following is true of the EOQ model? Note that the optimal order quantity, Q*, will be called EOQ. If the annual sales, in units, increases by 10%, then EOQ will increase by 10%. If the average inventory increases by 10%, then the total carrying costs will increase by 10%. If the average inventory increases by 10% the total ordering costs will increase by 10%. At any order quantity below the EOQ, then total carrying costs increase, but...

5. In which one of the following lists are ALL items relevant when computing net employment...

5. In which one of the following lists are ALL items relevant when computing net employment income? A. Employee contributions to a registered pension plan; signing bonus on accepting employment; use of an employer-owned automobile. B. Monthly automobile allowance; dental plan paid for by the employer; promotional cost incurred in selling the employer’s products. C. Subsidized meals in employer’s facilities; life insurance paid by the employer; legal fees incurred to collect unpaid salary. D. Tips and gratuities; dental insurance paid...

A firm has been ordering on the basis of EOQ for a product that has an...

A firm has been ordering on the basis of EOQ for a product that has an annual requirement of 22,000 units/year and the unit cost is $40/unit. Ordering and receiving costs are $75/order, and the annual carrying costs are 30% of the part value in storage. The supplier is offering a 5% price discount on orders greater than 800 units/order. Determine the EOQ without considering the quanitity discount What is the total annual cost including the value of the product...

Apply the EOQ model to the following quantity discount situation in which D = 450 units...

Apply the EOQ model to the following quantity discount situation in which D = 450 units per year, Co = $42, and the annual holding cost rate is 20%. Discount Category Order Size Discount (%) Unit Cost 1 0 to 99 0 $12.00 2 100 or more 3 $11.64 What order quantity do you recommend? If required, round your answer to the nearest whole number.

Apply the EOQ model to the following quantity discount situation in which D = 400 units...

Apply the EOQ model to the following quantity discount situation in which D = 400 units per year, Co = $36, and the annual holding cost rate is 25%. Discount Category Order Size Discount (%) Unit Cost 1 0 to 99 0 $10.00 2 100 or more 4 $9.60 What order quantity do you recommend? If required, round your answer to the nearest whole number. ***answer is not 4

Subjects